#MakerMon­day with habito, the digital mortgage broker

Most people throughout the UK have a horror story relating to mortgages, whether it’s the costs incurred, the months of paperwork or being rejected after getting caught in a time-consuming, inefficient process. Daniel Hegarty had a story too, and inspired by the trauma of trying to get a mortgage, decided to bring the industry into the 21st century by building habito, a digital mortgage broker. We caught up with Daniel to talk about the implications of habito and digital brokers.

Q: What’s your background?

Daniel: I started out as musician, composing for TV and film and toured the world before making my move into finance. I’d always been interested in the tech and startup scene and joined Wonga as Head of Product in 2007, before becoming their Head of Decision Science, Head of Strategy & New Ventures and Managing Director of Business Lending & Retail.

Q: You started your journey with your own personal story of woe in the mortgage world. What else drove you to start habito?

Daniel: You’re right! I bought a house, and the experience was horrific. In short, I saw an opportunity to transform the mortgage market after a frustrating and protracted experience applying for my own mortgage. After almost losing my house, I knew technology was the only way to bring the industry into the 21st century and decided to build habito - the first truly digital mortgage broker. I’ve always been driven to solve complex problems and explore different ways of doing things, so finding a solution to the archaic mortgage industry was a big motivation for me. It’s how habito was born.

Q: It’s true the mortgage system hasn’t embraced technology and adapted the way other industries have. Why is it so important to disrupt the mortgage space?

Daniel: It’s really important. We carried out some research last year and it’s staggering how many people are unaware of how much their mortgage costs them, and 700,000 people couldn’t even name their lender. We want to change this. For habito, fortunately we’re in the midst of a technological revolution across the entire financial services industry - application processes that used to take weeks are now taking minutes, and products that used to be opaque are becoming transparent and comprehensible to the consumer. It’s taken the mortgage industry longer than most to come to the party, but it’s finally happening. And we’re already helping thousands of customers secure the best mortgages.

Q: How?

Daniel: The housing market can only truly be boosted long-term by bringing the mortgage application process into the 21st Century – and we’re making it simpler, faster and cheaper through technology. Last year, we launched the world's first AI mortgage advice chat bot. Our DMA (digital mortgage adviser) allows millions of consumers to discuss their mortgage needs from any connected device, 24/7, without the need to speak to a human broker. We’ve taken a process that could take weeks to just schedule with a human broker down to 10 mins, anytime, anywhere from a mobile device. And that’s only the beginning. This year we’re planning to launch even more products that will make the traditional way consumers apply for mortgages disappear.

Q: What kind of technology lives behind the website, how robust and personalised is your service?

Daniel: We have a brilliant team of engineers who have built unique technology that analyses thousands of mortgage products over 60 lenders, so we’re able to find the best possible deal for Britons. Unlike human brokers, habito’s algorithm has no biases in favour of particular lenders or particular types of borrower, and offers no judgement about borrowers’ circumstances. It provides high-quality mortgage decisions that people can trust.

By digitising the mortgage process, habito can do everything at much greater speed. Applying for a mortgage currently takes around 2-3 weeks. With a digital broker like habito, this time can be reduced to a fraction of that - and without ever having to meet someone face-to-face or be buried in mountains of paperwork.

Plus, our system can evolve rapidly as technology improves. Once you enter your details to find the right deal, habito won’t have to ask you again for that information. Its system will know your circumstances and will be able, for instance, recommend better mortgage deals as they come available so you don’t end up paying over the odds. As it grows, we’ll be able to provide new services that automate more and more of the mortgage process to make life easier for homeowners.

Q: What challenges have you faced creating a trusted platform that deals with such an important, life changing process?

Daniel: We often get asked if robots will really replace a human broker, and right now the answer is no. But they can save a ton of time. There’s still a huge amount of manual labour that goes into every mortgage application, we’re using technology to cut that down wherever possible. Machines are great at spotting patterns, doing arithmetic and moving data around. Our human brokers will be available if the consumers want to speak to someone or for complex cases - that’s where humans can provide value.

Algorithms, robots, automation and machine learning are all technologies impacting our everyday lives and traditional industries, particularly the financial sector. While our trust issues with machines still have some distance to run, these reservations will be quickly undermined by the powers of convenience and distraction.

Bots and automated solutions naturally appeal to a younger generation who intuitively interact with chat services, the Internet and smartphones and value the transparency of automated financial platforms that seek to enhance the traditional. Last year, the Government took the first step in recognising the need for change with Today’s report, but innovation is already happening at a rapid pace. We’re entering a new, technology-enabled world, one that is going to create a more reliable and efficient world for consumers – if we let it.

Q: With so much property, especially in the south of England, being snapped up by cash buyers, investors and buy to let landlords looking to add to their portfolio, do you think habito can make it a fairer marketplace?

Daniel: The housing market is highly competitive, especially in London. And unfortunately the archaic processes has made it difficult for Britons to compete on equal ground, especially when it comes to getting a mortgage. That’s another big reason why we started habito - to help people find the right mortgage for them and at a deal they can truly afford.  We scan thousands of mortgage products across 60 lenders, so if there’s a mortgage on the market available we’ll find it.

Q: The workplace is changing, more people are self-employed, freelance or even on zero contract hours, does habito make it easier for these people to understand the mortgage process? How does it help them?

Daniel: Our message to the self-employed is there’s nothing to fear! Whether you’re a sole trader, a contractor or a limited company director, if you earn money and can prove it, lenders want you. Even the most traditional lenders know that the days of clocking in at the same job for a lifetime are gone, as Dominic, one of our customers found out – after he used habito, having been rejected by a broker. Habito aims to make the entire process faster, cheaper (it’s free) and simpler for all users.

Q: There are lots of changes are happening in the property market and the workplace, how will habito futureproof?

Daniel: It’s fantastic to see more innovation coming into such an antiquated market. Consumers have been crying out for it. We have ambitious plans for the next twelve months to automate more steps in the mortgage process and have built a highly scalable business that I’m confident will continue to thrive as long as we’re keeping the customers’ needs at the heart of everything we do.

Q: What’s in the pipeline for 2017?

Daniel: Busy…we’ll have more product updates, announcements, news and partnerships, so watch this space!

Q: What’s the dream for habito?

Daniel: To be the best mortgage business in the world!

Find out more about habito on their website